Power price increases ‘not states’ fault’

Queensland and NSW conservative governments have hit back at claims they are responsible for large power increases, saying the Gillard government is attempting to deflect the blame from the impact of the carbon tax and the Renewable Energy Target.

As a Senate inquiry into electricity prices holds public hearings in Melbourne today, Queensland Energy Minister
Mark McArdle
said the government was already conducting a review of the state network companies to curb spending on poles and wires.

Visiting Brisbane on Wednesday, Opposition Leader
Tony Abbott
renewed his attack on the impact of the carbon tax on electricity bills, and praised the Newman government for freezing household power tariffs.

Mr McArdle and NSW Energy Minister Chris Hartcher said the senate inquiry – which has to report back ahead of November’s Council of Australian Governments Meeting – had the potential to be used as a political football by Prime Minister
Julia Gillard
to attack the conservative state governments.

They said there was already other inquiries into power prices, with the Gillard government only willing to point the finger at state-owned network companies after the election of conservative state governments.

“Prime Minister Julia Gillard and Labor have been in office for almost five years," Mr McArdle said. “In that time, her only contribution to ­electricity prices has been to impose a carbon tax and renewable energy ­targets that have sent prices soaring."

The NSW government has yet to make a submission to the inquiry, which held public hearings in Sydney on Tuesday. “We would hope that the committee is interested in genuine solutions rather than pursuing a political agenda," Mr Hartcher said.

Australian Energy Regulator chairman Andrew Reeves, who implements the national electricity rules, will appear before the Senate committee this morning.

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The Victorian electricity distribution businesses, including representatives from Jemena, United Energy, Citi­power and
SP Ausnet
, will also give evidence. They argue Victoria’s de-regulated electricity market has delivered lower prices and network charges than in NSW and Queensland where the state owns the networks. “It is for state governments to decide whether or not privatisation of state owned distribution businesses would promote the interests of the people of their state," the joint submission said.

Meanwhile, the industry has welcomed moves by the Victorian government to allow consumers to move to flexible pricing plans for electricity from the middle of 2013.

Victorian Energy Minister
Michael O’Brien
said this would allow customers the choice to move from a flat tariff to plans based on off-peak, “shoulder" and peak times of the day.

“Customers who want to try new flexible pricing plans will be able to do so. Importantly, households who prefer to stay on their flat rate will not be forced to change," Mr O’Brien said.

The Australian Council of Social Service, which will go before the inquiry on October 9, has called for urgent reforms to protect consumers facing “unprecedented" price increases and “aggressive" marketing, and has backed as strong as possible regulation to prevent inefficient investment by networks owners that drives up retail prices unnecessarily.